Newport News Shipbuilding and Dry Dock Co. v. E.E.O.C., AFL-CIO-CLC

• Decision Date: 07 January 1982
• Docket Number: 81-1307,Nos. 81-1283,AFL-CIO-CLC,s. 81-1283
• Citation: 667 F.2d 448,27 FEP Cases 1219
• Parties: 27 Fair Empl.Prac.Cas. 1219, 27 Empl. Prac. Dec. P 32,329, 2 Employee Benefits Ca 2281 NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Appellee, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, and United Steelworkers of America,, and John McNulty, Defendants. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 448

667 F.2d 448

27 Fair Empl.Prac.Cas. 1219,

27 Empl. Prac. Dec. P 32,329,

2 Employee Benefits Ca 2281

NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Appellee, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, and United Steelworkers of America, AFL-CIO-CLC, and John

McNulty, Defendants.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Appellee.

Nos. 81-1283, 81-1307.

United States Court of Appeals,

Fourth Circuit.

Argued Oct. 6, 1981.

Decided Jan. 7, 1982.

Melissa Langa, E. E. O. C., Washington, D. C. (Leroy D. Clark, Gen. Counsel, Philip B. Sklover, Acting Associate Gen. Counsel, Vella M. Fink, Asst. Gen. Counsel, Washington, D. C., on brief), for appellant.

Stephen T. Myking, Washington, D. C. (Gerald D. Skoning, Thomas E. Shirley, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., on brief), for appellee.

Robert E. Williams, Douglas S. McDowell, Lorence L. Kessler, McGuiness & Williams, Washington, D. C., on brief, for amicus curiae Equal Employment Advisory Council.

Cynthia Wicker, Stephen Bokat, Stanley T. Kaleczyc, National Chamber Litigation Center, Washington, D. C., on brief, for amicus curiae Chamber of Commerce of the United States.

Before HAYNSWORTH, Senior Circuit Judge, and BUTZNER and HALL, Circuit Judges.

HAYNSWORTH, Senior Circuit Judge:

The question is the reach of the Pregnancy Discrimination Act. ¹ If an employer provides medical insurance coverage for his employees, the Pregnancy Discrimination Act clearly prohibits any exclusion of, or special limitations upon, benefits payable with respect to pregnancy-related disabilities. The question before us is whether an employer which extends such medical insurance benefits to the spouses of employees may limit benefits payable with respect to a spouse's pregnancy-related disability. We conclude that such a limitation is a violation of the Act.

I.

Newport News Shipbuilding and Dry Dock Company provides a hospitalization and medical-surgical health insurance plan for its employees. Coverage is extended to their spouses and unmarried children between the ages of 14 days and 19 years. The benefits include the full cost of a semi-private hospital room for up to 120 days and for other necessary hospital and medical expenses while hospitalized up to 100 per cent of the first $750 and 80 per cent of the excess for up to 120 days. The plan contains no special limitation upon benefits payable with respect to a pregnancy-related disability of a female employee. With respect to maternity benefits payable upon the delivery of a child of the spouse of a male employee, the plan provides full coverage for charges by physicians, but there is a $500 limitation upon the hospital charges in the absence of complications. To the extent that the hospital charges in connection with an uncomplicated delivery may exceed $500, therefore, a male employee receives less complete coverage of spousal disabilities than does a female employee.

A male employee filed a charge with the EEOC alleging discrimination against him arising out of the limitations upon hospital charges incurred in connection with a spouse's uncomplicated delivery of a child. The charge found support in the EEOC's Final Interpretive Guidelines on Sex Discrimination: Questions & Answers 21 and 22. ² It is there stated that "if an employer's insurance program covers the medical expenses of spouses of female employees, then it must equally cover the medical expenses of spouses of male employees, including those arising from pregnancy-related conditions."

Prompted by the filing of that complaint, the company sought in the district court a declaratory judgment that the guidelines were unauthorized and an injunction against their implementation and enforcement. Later, the EEOC filed its complaint against the company alleging discrimination on the basis of sex in the company's provision of health benefits.

The district court ruled for the company in the first case holding that the Pregnancy Discrimination Act applied to employees, but not to spouses of employees. See Newport News Shipbuilding and Dry Dock Company v. Equal Employment Opportunity Commission, 510 F.Supp. 66 (E.D.Va.1981). The EEOC's complaint was then dismissed, and appeals in both cases were consolidated here.

II.

The subsection added by the Pregnancy Discrimination Act to § 701 of Title VII of the Civil Rights Act of 1964, in pertinent part reads as follows:

"The terms 'because of sex' or 'on the basis of sex' include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work...."

With emphasis upon the second clause of the subsection and particularly the words "for all employment-related purposes", the company contended, and the district court held, that the subsection applied only to employees and benefits payable with respect to their disabilities and not to benefits payable with respect to the disabilities of spouses of male employees. In the background, of course, is the Supreme Court's holding in General Electric Co. v. Gilbert, 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976), which held that an employer, in providing disability insurance benefits for its employees, could exclude pregnancy-related disabilities. The Supreme Court had reasoned that classifications concerning pregnancy were not necessarily sex-based. The classification put pregnant women in one class and non-pregnant persons of both sexes in the other. The Supreme Court's decision in Gilbert, of course, triggered enactment of the Pregnancy Discrimination Act. The company, however, contends that the Congress intended no more than to circumvent the specific holding of the Supreme Court in Gilbert and construes the statute to extend benefits only to female employees and female applicants for employment. In any other context, including the context of this case, it is contended that the Supreme Court's decision in Gilbert remains unaffected.

The language of the statute is tortured by that construction. When an employer considers extension of medical benefits to the spouses of employees, it does so with an "employment-related purpose" just as it does when it considers the extension of such benefits to...